The Potential Applicability Of Fraudulent Transfer Law To Contemporary Business Transactions

Law360, New York (November 16, 2006, 12:00 AM EST) -- Business people should be aware that fraudulent transfer law may apply to a number of contemporary transactions: the paying of corporate of dividends either with borrowed money the company later cannot repay or at a time when the company is insolvent or becomes insolvent afterward; purchasing assets from financially distressed enterprises; and withdrawals of investments and the profits from insolvent investment funds.

Such transactions implicate fraudulent transfer law; and if the economy should turn down significantly and the enterprises that have engaged in such transactions are...